Ireland Et Al 2009 - Conceptualizing Corporate Entrepreneurship Strategy - ETP (Complementar) (1) 2

1042-2587
© 2009 Baylor University
Conceptualizing
E T&P Corporate
Entrepreneurship
Strategy
R. Duane Ireland
Jeffrey G. Covin
Donald F. Kuratko
Our knowledge of corporate entrepreneurship (CE) continues to expand. However, this

knowledge remains quite fragmented and non-cumulative. Herein, we conceptualize CE
strategy as a useful focal point for integrating and synthesizing key elements within CE’s
intellectual domain. The components of our CE strategy model include (1) the antecedents
of CE strategy (i.e., individual entrepreneurial cognitions of the organization’s members and
external environmental conditions that invite entrepreneurial activity), (2) the elements of CE
strategy (i.e., top management’s entrepreneurial strategic vision for the firm, organizational
architectures that encourage entrepreneurial processes and behavior, and the generic forms
of entrepreneurial process that are reflected in entrepreneurial behavior), and (3) the out-
comes of CE strategy (i.e., organizational outcomes resulting from entrepreneurial actions,
including the development of competitive capability and strategic repositioning). We discuss
how our model contributes to the CE literature, distinguish our model from prior models, and
identify challenges future CE research should address.
Introduction
Conditions in the global business environment demand that established firms adopt
entrepreneurial strategies (e.g., McGrath & MacMillan, 2000; Morris, Kuratko, & Covin,
2008) as a path to success. According to Cooper, Markman, and Niss (2000, p. 116), for
example, “entrepreneurial strategies suggest ways to revitalize existing organizations and
make them more innovative.” As Amit, Brigham, and Markman (2000) observed, “entre-
preneurial strategies allow people to be innovative, creative, and responsible for decisions
that they make” (quoted in Meyer & Heppard, 2000, p. 10). From the perspective of
organizational strategy, this outcome may be highly desirable. The reason for this is that
diffusing strategic capabilities throughout firms and empowering individuals to leverage
them is foundational to successfully developing and implementing strategies (Liedtka &
Rosenblum, 1996). By pursuing entrepreneurial strategies, firms place themselves
in positions to regularly and systematically recognize and exploit entrepreneurial
Please send correspondence to: R. Duane Ireland, tel.: (979) 862-3963; e-mail: direland@mays.tamu.edu, to
Jeffrey G. Covin at covin@indiana.edu, and to Donald F. Kuratko at dkuratko@indiana.edu.
January, 2009 19
opportunities (Eisenhardt, Brown, & Neck, 2000). In short, what entrepreneurial strategy
does or can do for a firm has been a subject of much discussion (Ireland, Hitt, Camp, &
Sexton, 2001; Kuratko, Ireland, Covin, & Hornsby, 2005).
Zahra, Jennings, and Kuratko’s (1999) review of the corporate entrepreneurship (CE)
literature concluded with the observation that a need exists to explore different concep-
tualizations of firm-level entrepreneurship. Entrepreneurial strategy is arguably a core
construct within the CE literature and a specific manifestation of firm-level entrepreneur-
ship. Cooper et al. (2000, p. 120) asserted that “entrepreneurial strategy has begun to be
viewed as a potential source of firms’ competitive advantage, a way in which established
firms can develop capabilities that are central to their continuing success.”
In spite of its potential importance, a precise specification of what entrepreneurial
strategy is has been elusive for scholars. Hitt stated, “It is difficult to provide a precise
definition of entrepreneurial strategy . . .” (quoted in Meyer & Heppard, 2000, p. 5).
Likewise, Eisenhardt commented, “The term entrepreneurial strategy may signal too
many different things to people, and trying to label strategies as entrepreneurial can be
awkward” (quoted in Meyer & Heppard, 2000, p. 6).
A fair amount of evidence supports Eisenhardt’s claim. For example, Amit et al.
(2000) defined entrepreneurial strategy as a largely internal, organizational phenomenon:
“When we discuss entrepreneurial strategies, we are focusing primarily on the internal
organization of the firm rather than on the more complex notion of dynamic competitive
strategies” (quoted in Meyer & Heppard, 2000, p. 9). By contrast, Morris et al. (2008,
p. 198) state the following: “. . . the application of entrepreneurial thinking to the firm’s
core strategy is primarily dealing with the following external questions. Where are the
unfulfilled spaces in the marketplace? How can the firm differentiate itself on a sustained
basis? Where can we lead the customer?”
To some, such as Russell and Russell (1992, p. 640), entrepreneurial strategy is a
possible element of the larger corporate strategy: “. . . an entrepreneurial strategy involves
a persistent, organizationally sanctioned pattern of innovation-related activities and
resource allocations that compose one component of the firm’s comprehensive corporate
strategy.” To others, such as Barney (quoted in Meyer & Heppard, 2000, p. 11), “If you
define entrepreneurship as the process of creating economic rents, then entrepreneurial
strategy and entrepreneurship are essentially synonymous. Any rent-generating strategy is
entrepreneurial.” Some scholars use the term entrepreneurial strategy to refer to a specific
strategy (e.g., Mintzberg & Waters, 1985). Others (e.g., Drucker, 1985; Johnson & Van de
Ven, 2002; Kazanjian, Drazin, & Glynn, 2002; Murray, 1984) conceive of entrepreneurial
strategy as being manifested in many forms. A net effect of the disparate ways in which
entrepreneurial strategy has been depicted in the literature is the failure of this literature
to produce satisfyingly cumulative knowledge on the topic. Moreover, those who might
seek to enact entrepreneurial strategies in their firms are virtually guaranteed to be
confused by the array of ideas in the literature.
Before examining its component parts, we think it is important to place our model
contextually. In this regard, we can note that we do not seek to use this model to represent
how entrepreneurship commonly intervenes or interfaces with an organization’s strategic
processes. As Burgelman (1983) cogently argued, entrepreneurial initiatives commonly
occur as unplanned by-products of an organization’s deliberate and spontaneous actions.
Thus, the occurrence of autonomous entrepreneurial actions within a firm’s strategic
processes or the validation of such initiatives through those processes does not necessarily
signify the presence of a CE strategy. Rather, consistent with the strategic entrepreneur-
ship concept (Ireland & Webb, 2007b; Ireland, Hitt, & Sirmon, 2003), we argue that CE
strategy implies that a firm’s strategic intent (Hamel & Prahalad, 1989) is to continuously
20 ENTREPRENEURSHIP THEORY and PRACTICE

and deliberately leverage entrepreneurial opportunities (Shane & Venkataraman, 2000)
for growth- and advantage-seeking purposes. Thus, while evidence of entrepreneurial
initiatives can be located in many and perhaps most established organizations, the mere
presence or ubiquity of those initiatives should not be interpreted as evidence that a CE
strategy is in use. As we are proposing the concept, CE strategy implies a level of
purposefulness and intentionality with respect to entrepreneurial initiatives that is any-
thing other than inevitable.
Given the evidence cited earlier and the status of the field’s knowledge about corpo-
rate entrepreneurship as strategy, we seek to present a model of corporate entrepreneurial
strategy (herein labeled CE strategy to distinguish it from the strategy of independent new
ventures). We define CE strategy as a vision-directed, organization-wide reliance on
entrepreneurial behavior that purposefully and continuously rejuvenates the organization
and shapes the scope of its operations through the recognition and exploitation of
entrepreneurial opportunity.1 The specific purpose of our work is to outline a model
depicting (1) the individual (i.e., person-based) and environmental antecedents of a CE
strategy, (2) the most salient elements of a CE strategy (and the relationships among these
elements), and (3) the organizational outcomes associated with using a CE strategy. In the
context we are describing here then, we seek to depict corporate entrepreneurship as a
distinct, identifiable type of strategy, bring a significant degree of clarity to the matter of
how CE strategy might be conceptualized and, thereby, provide a useful reference point
for future theoretical explorations and managerial actions.
Our paper proceeds as follows. We first discuss the principal ways in which our model
of CE strategy is distinct from existing models of entrepreneurial phenomena in estab-
lished organizations. We then introduce the key constructs of CE strategy and propose
specific linkages between the various components of CE strategy as well as linkages
between those CE strategy components and their antecedents and consequences. The
paper closes with summary comments as well as suggestions for future research.
Prior Models of Entrepreneurial Phenomena in Established Organizations
Sharma and Chrisman (1999, p. 18) define CE as “the process whereby an individual or
a group of individuals, in association with an existing organization, create a new organi-
zation or instigate renewal or innovation within that organization.” Various models of CE
appear in the scholarly literature. The proposed model of CE strategy is distinct from prior
models of entrepreneurial phenomena in established organizations in four important
aspects—the behavioral dimension, the locus of entrepreneurship, the philosophical justi-
fication, and CE as a unique and identifiable strategy. We briefly consider nine prior
models.2 These models are summarized in Table 1. They are reviewed on the basis of five
criteria—the focal entrepreneurial phenomenon, the locus of entrepreneurship, the
1. Entrepreneurial opportunities can be either discovered or created (Alvarez & Barney, 2005, 2008; Lumpkin
& Lichtenstein, 2005). In the current manuscript, opportunity recognition is conceived of as the larger
entrepreneurial process within which both opportunity discovery and opportunity creation occur.
2. Additional models of CE-related phenomena can be found throughout the entrepreneurship and strategy
literatures. Examples include those of Antoncic (2003), Block and MacMillan (1993), Floyd and Wooldridge
(1999), Hayton (2005), Ireland et al. (2003), Morris et al. (2008), and Sathe (2003). The specific models
reviewed herein are representative of the diverse foci of CE models appearing in the literature. Two of the
models discussed here—those of Covin and Slevin (1991) and Lumpkin and Dess (1996)—are reviewed in
detail because of their relatively greater overall similarity and relevance to the specific focus of the proposed
CE strategy model.
January, 2009 21
22
Table 1
Models of Entrepreneurial Phenomena in Established Organizations
Model characteristics
Relationship between Causally adjacent Causally adjacent outcomes

Focal entrepreneurial Locus of entrepreneurial phenomenon antecedents of the of the entrepreneurial
Model phenomenon entrepreneurship and strategy entrepreneurial phenomenon phenomenon
Burgelman (1983) ICV Corporate management, new venture Corporate strategy can be extended to Structural context—organizational and Corporate strategy changes
division management, group accommodate new business activities administrative mechanisms used
leader/venture manager resulting from ICV implement the current corporate strategy
Covin and Slevin (1991) EO Not specified Reciprocal relationship between Firm performance, strategic variables, Firm performance, strategic variables,
EO and strategy environmental variables, managerial and environmental variables, managerial
organizational variables and organizational variables
Dess et al. (2003) Sustained regeneration, organizational Not specified Not specified Prior organizational knowledge Acquisitive and experimental
rejuvenation, strategic renewal, organizational learning
domain redefinition
Floyd and Lane (2000) Strategic renewal (SR) Top-, middle-, and operating-level SR process leads to changes in strategy Macroenvironment, competitive Macroenvironment, competitive
managers environment, organizational control environment, organizational control
systems systems
Guth and Ginsberg (1990) ICV and SR Not specified Strategy directly affects ICV and SR Environmental variables, strategic leaders, Firm performance
organization conduct/form variables,
firm performance
Hornsby et al. (1993) Individual-level entrepreneurial Individuals/organizational members Not specified Organizational characteristics, individual Business/feasibility planning
behavior characteristics, precipitating event
Kuratko et al. (2004) Individual-level entrepreneurial Individuals/organizational members Individual-level entrepreneurial behavior Organizational antecedents—rewards, Intrinsic and extrinsic individual-level
behavior affects and is affected by strategy, both management support, resources, outcomes, financial and behavioral
indirectly (organization is mediator) organizational boundaries, work organizational-level outcomes
discretion/autonomy
Kuratko, Ireland, et al. Individual-level entrepreneurial Middle-level managers Not specified Organizational antecedents—management Various possible individual- and
(2005) behavior support, work discretion/autonomy, organizational-level outcomes
rewards/reinforcements, time
availability, organizational boundaries
Lumpkin and Dess (1996) EO Not specified Strategy and EO are distinct, Not specified Firm performance
non-causally related phenomena
ICV, Internal corporate venturing; EO, entrepreneurial orientation; SR, strategic renewal.
ENTREPRENEURSHIP THEORY and PRACTICE

relationship between the entrepreneurial phenomenon and strategy, the causally adjacent
antecedents of the entrepreneurial phenomenon, and the causally adjacent outcomes of the
entrepreneurial phenomenon.
Guth and Ginsberg’s (1990) model depicts some possible determinants and effects
of the CE phenomena of corporate venturing and strategic renewal. Their model is very
general in that it does not distinguish between the causes and effects of these two
entrepreneurial phenomena that, they argue, constitute CE’s domain. Importantly, in the
Guth and Ginsberg (1990) model, CE is not portrayed as a strategy but as a set of
phenomena that exist separate from strategy. Along with structure, process, and core
values and beliefs, strategy is identified as an organizational-level driver of CE in this
model.
The specific CE phenomena of internal corporate venturing and strategic renewal are
the foci of Burgelman’s (1983) and Floyd and Lane’s (2000) models, respectively. Both
of these models are process-focused. That is, they depict how the venturing and renewal
processes manifest themselves within organizations, with a particular focus on the roles
and behaviors of various levels of management within the entrepreneurial phenomena of
interest. Why the entrepreneurial phenomena of venturing or renewal come about as well
as their ultimate effects are not of particular concern in these conceptualizations. In
essence, the Burgelman (1983) and Floyd and Lane (2000) models illuminate the work-
ings within the venturing and renewal boxes, as depicted in the Guth and Ginsberg (1990)
model. As with the Guth and Ginsberg model, strategy is exogenous to Burgelman’s and
Floyd and Lane’s depictions of how the venturing and renewal processes, respectively,
operate.
An alternative representation of the domain of CE is adopted in the Dess et al. (2003)
model of how knowledge is created through four types of CE activity. Specifically, rather
than adopting Guth and Ginsberg’s (1990) categorization scheme of corporate venturing
and strategic renewal for describing the phenomena of CE, Dess et al. base their CE model
on the four forms of CE proposed by Covin and Miles (1999)—namely, sustained
regeneration, organizational rejuvenation, strategic renewal, and domain redefinition. The
Dess et al. model outlines how acquisitive and experimental learning processes mediate
the relationships between the aforementioned CE forms and the emergence of specific
types of knowledge (i.e., technical, integrative, and exploitive). Firm strategy is neither an
explicit nor implied component of the Dess et al. model. Rather, this model is tightly
focused on exploring the causal interrelationships between specific CE forms and orga-
nizational learning.
The Hornsby et al. (1993) model of the determinants of new venture championing
behavior is similar to the Burgelman (1983) model in that it focuses on the specific CE
phenomenon of internal corporate venturing. The Hornsby et al. model, however, is more
limited in scope, focusing on what causes individuals to “act intrapreneurially.” This sole
focus on the individual (albeit within a larger organizational context) clearly distinguishes
the Hornsby et al. model from the current model’s focus on CE as an identifiable, distinct
strategy.
Variations on the Hornsby et al. (1993) model have been proposed by Kuratko et al.
(2004) and Kuratko, Ireland, et al. (2005). Specifically, the Kuratko et al. (2004) model
extends that of Hornsby et al. by depicting individuals’ and organizations’ evaluations of
entrepreneurial outcomes as determinants of future individual-level entrepreneurial
behavior. The Kuratko, Ireland, et al. (2005) model retains this evaluative process com-
ponent and is focused more specifically on the antecedents and outcomes of middle-level
managers’ entrepreneurial behavior. As with the Hornsby et al. model, neither of these
latter models is intended to depict CE as a strategic construct.
January, 2009 23
Covin and Slevin’s (1991) and Lumpkin and Dess’s (1996) models have the great-
est similarity to the one we present in this paper. These authors modeled the antecedents
and/or consequences of the organizational-level phenomenon of entrepreneurial orien-
tation (EO), defined by Lumpkin and Dess (p. 136) as “the processes, practices, and
decision-making activities that lead to new entry.” The current model of a CE strategy
differs from these two commonly cited models of EO in four important ways—(1) by
conceptualizing EO as an organizational state or quality, (2) by specifying organiza-
tional locations from which entrepreneurial behavior and processes may emerge,
(3) by explicitly specifying a philosophical component of a CE strategy, and (4) by
specifying that organizations can pursue entrepreneurship as a separate and identifiable
strategy.
First, EO is an organizational state or quality that is defined in terms of several
behavioral dimensions. Based on the pioneering work of Miller (1983), Covin and Slevin
(1991) defined EO as implying the presence of organizational behavior reflecting risk-
taking, innovativeness, and proactiveness. Lumpkin and Dess’s (1996) model of EO adds
competitive aggressiveness and autonomy to this list of attributes. By contrast, the CE
strategy model shown in Figure 1 specifies not what the behavioral dimensions of EO are,
but how the organizational state or quality that is EO is manifested across the organiza-
tion by implementing a particular strategy. As such, an EO is subsumed within our
model of CE strategy. However, unlike the current CE strategy model, existing
EO models do not specify where to look for evidence of entrepreneurship within the
organization.
Second, and similar to the preceding point, existing EO models identify no specific
locus or loci of entrepreneurship. In particular, the question of where within the
Figure 1
An Integrative Model of Corporate Entrepreneurship Strategy

Antecedents of a Corporate Consequences of Using a Corporate
Entrepreneurship Strategy Elements of a Corporate Entrepreneurship Strategy Entrepreneurship Strategy
Level of
Analysis
External Environmental Pro-Entrepreneurship
Conditions Organizational
Architecture
Competitive Strategic
The • Competitive intensity
Capability Repositioning
Organization • Technological change • Structure
• Product-market • Culture
fragmentation • Resources/capabilities
• Product-market • Reward systems
emergence
Entrepreneurial
Top-Level
Strategic
Managers
Vision
Individual
Entrepreneurial Entrepreneurial
Cognitions Processes & Behavior
Organizational
Members Entrepreneurial… • Opportunity
• Beliefs recognition
• Attitudes • Opportunity
• Values exploitation

organization entrepreneurial behavioral and processes originate is not addressed. Rather,
it is simply noted that in entrepreneurial organizations, “particular [entrepreneurial]
behavioral patterns are recurring” (Covin & Slevin, 1991, p. 7). By contrast, the current
model, by virtue of its depiction of CE strategy as having three distinct elements, clearly
specifies a set of organizational locations from which entrepreneurial behavior and pro-
cesses can be expected to emerge.
Third, in existing EO models, the presence of an entrepreneurial orientation is inferred
from evidence of organizational behavior reflecting the risk-taking, innovativeness, pro-
activeness, competitive aggressiveness, and/or autonomy dimensions. Consistent with
Lumpkin and Dess’s (1996) definition of EO and Covin and Slevin’s (1991, p. 8)
assertions involving this phenomenon (e.g., “An organization’s actions make it entrepre-
neurial”), organizational behavior is regarded as the means through which an EO can be
recognized. By contrast, the current model of a CE strategy treats entrepreneurial behavior
as but partial evidence of the presence of a CE strategy. The CE strategy phenomenon also
has a philosophical component, represented by entrepreneurial strategic vision that
accompanies and provides the value justification and stimulus for a pro-entrepreneurial
organizational architecture as well as for entrepreneurial processes and behavior. While
this philosophical justification for entrepreneurial behavior could be assumed to operate in
models of EO, it is made explicit in the current model.
Fourth, and perhaps most importantly, current EO models (as with Guth and Gins-
berg’s [1990] CE model) explicitly depict strategy as a factor separate from EO. Lumpkin
and Dess’s (1996) model depicts strategy as a moderator of the EO–organizational
performance relationship. Covin and Slevin’s (1991) model does the same, but also notes
that EO and strategy may be reciprocally related. The proposed CE strategy model, by
contrast, is a model of a unique, identifiable strategy—entrepreneurial strategy as mani-
fested in established organizations. The distinguishing premise of our model is that
entrepreneurship can be pursued as an organizational strategy per se. This point is not
novel to the current discussion. Recently, others have advanced the possibility that entre-
preneurial strategy is a distinct type of organizational strategy (see Hitt, Ireland, Camp, &
Sexton, 2002; Ireland & Webb, 2007b; Ireland et al., 2001, 2003; Meyer & Heppard,
2000). What distinguishes the current model is its depiction of how corporate entrepre-
neurship can be manifested as an identifiable strategy, as inferable from the presence of
patterns of entrepreneurial behavior and an overall perspective that lends meaning to and
directs that activity (Mintzberg, 1987a).
A Model of Corporate Entrepreneurship Strategy
As depicted in Figure 1, we believe that a CE strategy is manifested through the

presence of three elements: an entrepreneurial strategic vision, a pro-entrepreneurship
organizational architecture, and entrepreneurial processes and behavior as exhibited
across the organizational hierarchy. Our conceptualization of CE as a strategy uses two of
Mintzberg’s (1987a,b) “five definitions of strategy”—strategy as perspective and strategy
as pattern. As perspective, a CE strategy represents a shared ideology favoring the pursuit
of competitive advantage principally through innovation and entrepreneurial behavior on
a sustained basis (Russell, 1999). This ideology is reflected in the entrepreneurial stra-
tegic vision element of our model. As pattern, CE strategy denotes a continuous, consis-
tent reliance on entrepreneurial behavior, “whether intended or not” (Mintzberg, 1987a,
p. 12). The consistent behavior required to enact a CE strategy is captured in our model
by entrepreneurial processes and behavior. Organizational architecture is the conduit
January, 2009 25
used to assure congruence between perspective (the vision) and pattern (the consistent
behaviors). In slightly different words, the pro-entrepreneurship organizational architec-
ture shown in Figure 1 is a recursive path through which entrepreneurial vision and
behaviors interact to create a CE strategy. In addition, the antecedents of CE strategy (i.e.,
individual entrepreneurial cognitions of the organization’s members and external envi-
ronmental conditions that invite entrepreneurial activity) and the outcomes of CE strategy
(i.e., organizational outcomes resulting from entrepreneurial actions, including the devel-
opment of competitive capability and strategic repositioning) are shown in the model.
The Antecedents
Individual Entrepreneurial Cognitions to Entrepreneurial Strategic Vision

Entrepreneurial cognitions are “the knowledge structures that people use to make
assessments, judgments, or decisions involving opportunity evaluation, venture creation,
and growth” (Mitchell et al., 2002, p. 97). The specific entrepreneurial cognitions of
interest in the current model include individuals’ beliefs, attitudes, and values regarding
entrepreneurship. Entrepreneurial beliefs are the fundamental thoughts one harbors about
entrepreneurship. When entrepreneurial beliefs are about matters for which evaluative
judgments are made, they represent entrepreneurial attitudes. Long lasting, deeply held,
and prescriptive or proscriptive entrepreneurial attitudes denote entrepreneurial values.
We refer to entrepreneurial beliefs, attitudes, and values reflecting a positive disposition
toward entrepreneurial phenomena as pro-entrepreneurship cognitions.
Consistent with what Meyer and Heppard (2000) refer to as an “entrepreneurial
dominant logic,” an entrepreneurial strategic vision represents a commitment to innova-
tion and entrepreneurial processes and behavior that is expressed as the organization’s
philosophical modus operandi. Sometimes only defining areas in which opportunities
are to be sought (Muzyka, De Koning, & Churchill, 1995), an effective entrepreneurial
strategic vision is more a reflection of an entrepreneurial mind-set—or a way of thinking
about business that captures the benefits of uncertainty (McGrath & MacMillan, 2000)—
than a precursor to particular strategic commitments. Top-level managers articulating an
entrepreneurial strategic vision seek to direct attitude and outlook more than specific
behavior. An entrepreneurial strategic vision is the mechanism by which top-level man-
agers paint the picture of the type of organization they hope to lead in the future—an
organization that is opportunity-focused, innovative, and self-renewing.
A premise of the current model is that pro-entrepreneurship cognitions among top-
level managers are essential to the emergence of an entrepreneurial strategic vision. The
presence of pro-entrepreneurship cognitions suggests that individuals have broadly favor-
able thoughts about entrepreneurship as a phenomenon, and that these thoughts are
non-context-specific—that is, they exist as “personal” cognitions rather than as products
of the specific situations in which individuals may find themselves. Entrepreneurial
strategic visions emerge when top-level managers’ broadly favorable thoughts about
entrepreneurship collectively assume a coherent form that has meaning and prescriptive
value for the organization. In other words, the organization becomes the specific vehicle
to which the non-context-specific pro-entrepreneurship cognitions are applied. The fol-
lowing proposition is offered:
Proposition 1: The strength of top-level managers’ pro-entrepreneurship cognitions
is positively related to the emergence of an entrepreneurial strategic vision.

Individual Entrepreneurial Cognitions to Pro-Entrepreneurship
Organizational Architecture
Pro-entrepreneurship cognitions are not solely within the cognitive domain of top-
level managers. Rather, managerial and non-managerial persons throughout organizations
can manifest them. When pro-entrepreneurship cognitions are broadly descriptive of
members, they are reflected in the organization’s culture. “The way we do things around
here” and, reflecting greater intentionality of behavior, “The way we expect to do things
around here” describe organizational culture (Weick & Sutcliffe, 2001). More formally,
culture reflects shared basic assumptions that a collective body has developed to denote
appropriate ways to identify and cope with issues and opportunities (Schein, 1985).
Just as the non-context-specific pro-entrepreneurship cognitions of top-level manag-
ers are expected to influence the emergence of an entrepreneurial strategic vision, the
non-context-specific pro-entrepreneurship cognitions of the entire organizational mem-
bership are expected to influence the strength of cultural norms favoring entrepreneurial
behavior. Again, the organization becomes the specific vehicle to which the non-context-
specific pro-entrepreneurship cognitions are applied. As implied by the dual-headed arrow
between the Individual Entrepreneurial Cognitions and the Pro-Entrepreneurship Organi-
zation Architecture boxes of Figure 1, an organization’s culture may also affect its
members’ non-context-specific thoughts about entrepreneurship. Thus, a relationship of
reciprocal causality is anticipated between organizational members’ entrepreneurial cog-
nitions and the presence of cultural norms favoring entrepreneurial behavior. The follow-
ing proposition is offered:
Proposition 2: The strength of organizational members’ pro-entrepreneurship cog-

nitions is positively related to the strength of cultural norms favoring entrepreneurial
behavior.
Individual Entrepreneurial Cognitions to Entrepreneurial Processes

and Behavior
While entrepreneurial behavior can be manifested through many specific actions,
recognizing and exploiting opportunity are the essence of entrepreneurial behavior as well
as the defining processes of entrepreneurship (Shane & Venkataraman, 2000). When an
organization’s members harbor pro-entrepreneurship cognitions, they will more likely
recognize and seek to exploit entrepreneurial opportunities, defined by Eckhardt and
Shane (2003, p. 336) as “situations in which new goods, services, raw materials, markets
and organizing methods can be introduced through the formation of new means, ends, or
means-ends relationships.” The expectation that pro-entrepreneurship cognitions will lead
to entrepreneurial opportunity recognition is consistent with arguments by Mitchell et al.
(2002), Shane and Venkataraman, and Eckhardt and Shane that cognitions can predispose
individuals toward recognizing entrepreneurial opportunity. The actual pursuit of oppor-
tunities is a function of how attractive they are to the individuals who recognized them—
that is, a function of the strength of the individuals’ pro-entrepreneurship cognitions. In
short, the following proposition is offered:
Proposition 3 (a,b): The strength of organizational members’ pro-entrepreneurship

cognitions is positively related to the probability that those individuals will (a)
recognize entrepreneurial opportunities and (b) seek to exploit entrepreneurial
opportunities.
January, 2009 27
External Environmental Conditions to Entrepreneurial Strategic Vision
Certain increasingly common environmental conditions can precipitate the perceived
need for a CE strategy. Zahra (1991) argued that greater amounts of environmental hostility,
dynamism, and heterogeneity call for a CE strategy. Similarly, Lumpkin and Dess (1996)
suggested that firms facing rapidly changing, fast-paced competitive environments might
be best served by implementing a CE strategy. The list of environmental conditions that can
trigger entrepreneurial activity in established firms is quite extensive (see, for example,
Kuratko et al., 2004; Sathe, 2003; Stopford & Baden-Fuller, 1994). Based on a review
of literature in the areas of corporate entrepreneurship and organizational innovation,
Schindehutte, Morris, and Kuratko (2000) identified no less than 40 “key triggers” of CE
activity, roughly half of which would be considered “environmental” in nature.
We believe that an entrepreneurial strategic vision is a logical response to the presence
of three often-related environmental conditions: competitive intensity, technological
change, and evolving (fragmenting and/or emerging) product-market domains. Other
environmental conditions could be antecedents to an entrepreneurial strategic vision.
However, given the theoretical and empirical support for their significance, we focus on
these three conditions as the principal external transformational triggers that can, in the
presence of pro-entrepreneurship cognitions among top-level managers, lead to the emer-
gence of an entrepreneurial strategic vision.
Competitive intensity is often associated with relative parity among firms competing
in an industry (Porter, 1980). To break out of parity, firms must create and exploit some
basis for competitive advantage. This frequently translates into an innovation imperative.
That is, firms must pursue technological, product, market, strategic, or business model
innovation, exploiting opportunities to compete on distinct and valued bases, or risk being
pushed out of the market by rivals who do.
Technological change creates a situation where competitive advantage is short-lived.
Barring strong appropriability regimes that protect technological knowledge, firms with
technology-based competitive advantages often must scramble to exploit them before the
forces of technological diffusion erode them (Teece, 1986). Metaphorically speaking,
firms in such environments are on an innovation treadmill. They must continuously
innovate to stay in the game, and they must innovate ahead of their competitors—in ways
or arenas that markets value—to achieve competitive superiority.
The evolutionary forces of fragmentation and emergence in the firm’s product-market
domain(s) are the third external environmental condition that invites the emergence of an
entrepreneurial strategic vision in organizations whose top-level managers harbor pro-
entrepreneurship cognitions. Fragmenting product-market domains contribute to height-
ened environmental heterogeneity, an environmental dimension associated with the
adoption of CE strategies (Miller & Friesen, 1984). In particular, fragmentation creates
opportunities for successful new product introductions. By providing new product-based
value propositions that more closely match the demand characteristics of evolving
markets, firms can position their products to intersect with the evolutionary paths of their
markets. Likewise, market emergence creates innovation opportunities. Such emergence
can be an exogenous evolutionary force to which the firm using a CE strategy can react,
preempting competitors in the pursuit of opportunity (Covin, Slevin, & Heeley, 2000).
Thus, intense competition, rapid technological change, and the conditions of product-
market fragmentation and/or emergence individually and collectively define an environ-
mental context conducive to the emergence of entrepreneurial opportunities. While such
opportunities may be recognized and pursued by various levels of management within an
organization, it is essential to the emergence of a CE strategy that top-level managers

embrace the concept and promise of entrepreneurship as the organization’s modus oper-
andi. A recurring theme in the CE literature is that “the entrepreneurial message must flow
from the top” (Higdon, 2000, p. 16). Top-level managers are recognized as the “purveyors
of vision” (Heller, 1999) and shapers of corporate purpose (Bartlett & Ghoshal, 1997).
Moreover, organizational members must understand the entrepreneurial vision from the
perspective of senior management (Kuratko, Hornsby, Naffziger, & Montagno, 1993).
Of course, not all executives whose organizations face the environmental conditions
described earlier will embrace an entrepreneurial strategic vision. Consistent with the
concept of strategic choice (Child, 1972), the state of the environment cannot result in
the emergence of an entrepreneurial strategic vision regardless of top-level managers’
entrepreneurial cognitions. However, top-level managers’ entrepreneurial cognitions can
result in the emergence of an entrepreneurial strategic vision regardless of the state of the
environment. Stated differently, the identified external environmental conditions will only
influence the emergence of an entrepreneurial strategic vision when top-level managers’
cognitions exhibit some degree of pro-entrepreneurship bias. The stronger this bias, the
more likely it will be that the previously identified environmental conditions will be
associated with the emergence of an entrepreneurial strategic vision as suggested in the
following proposition:
Proposition 4 (a,b,c): The (a) intensity of competition, (b) rapidity of technological
change, and (c) extensiveness of product-market domain change (as reflected in
product-market fragmentation and emergence rates) are positively related to the
emergence of an entrepreneurial strategic vision among top-level managers.
product-market fragmentation and emergence rates) are more positively related to the
emergence of an entrepreneurial strategic vision when top-level managers have strong
pro-entrepreneurship cognitions than when those individuals do not have strong
pro-entrepreneurship cognitions.
External Environmental Conditions to Entrepreneurial Processes

and Behavior
An argument parallel to that advanced above also explains the anticipated relationship
between organizational members’ entrepreneurial behaviors and the external environmen-
tal conditions of competitive intensity, technological change, and product-market domain
evolution. Specifically, just as entrepreneurial cognitions were argued to moderate the
relationship between conditions in an organization’s environment and the emergence of an
entrepreneurial strategic vision, they will also likely moderate the relationship between
conditions in an organization’s environment and the processes of opportunity recognition
and exploitation within which specific entrepreneurial behaviors occur.
Generally speaking, organizational members’ pro-entrepreneurship cognitions faci-
litate recognizing entrepreneurial opportunity by enabling these individuals to be
well attuned to the presence of such opportunity (Kuratko et al., 1993; McGrath &
MacMillan, 2000). As noted earlier, competitive intensity, technological change, and
product-market domain evolution will be conducive to the emergence of entrepreneurial
opportunities. Thus, these environmental conditions should be most strongly associated
with opportunity recognition among an organization’s members when those members
have pro-entrepreneurship cognitions. Such cognitions, reflecting favorability toward
January, 2009 29
entrepreneurial phenomena, should also lead to efforts to exploit the entrepreneurial
opportunities emerging from environments with the aforementioned characteristics.
These expectations are formalized in the following propositions:
probability that organizational members will recognize entrepreneurial opportunities.
probability that organizational members will recognize entrepreneurial opportunities
when those members have strong pro-entrepreneurship cognitions than when those
members do not have strong pro-entrepreneurship cognitions.
probability that organizational members will seek to exploit entrepreneurial opportu-
nities.
probability that organizational members will seek to exploit entrepreneurial opportu-
nities when those members have strong pro-entrepreneurship cognitions than when
those members do not have strong pro-entrepreneurship cognitions.
The Elements
Entrepreneurial Strategic Vision to Pro-Entrepreneurship

Organizational Architecture
Top-level managers shoulder much of the responsibility for promoting entrepre-
neurial behavior when a CE strategy is used. They meet this responsibility, in part, by
developing and communicating an entrepreneurial strategic vision. The responsibility for
entrepreneurship, however, does not solely rest with senior management—it is a shared
responsibility (Bartlett & Ghoshal, 1997; Covin & Slevin, 2002). Top-level managers
must work to create organizational architectures in which entrepreneurial initiatives
flourish without their direct involvement (Miles, Heppard, Miles, & Snow, 2000). As
stated by McGrath and MacMillan (2000, p. 301), “Your most important job as an
organizational leader is not to find new opportunities or to identify the critical competi-
tive insights. Your task is to create an organization that does these things for you as a
matter of course.” In our model, a pro-entrepreneurship architecture is the organizational
context through which the entrepreneurial strategic vision is translated into specific
entrepreneurial processes and behaviors.
A pro-entrepreneurship organizational architecture is not a unique organizational
form but an internal environment or organizational context exhibiting certain attributes
that individually and collectively encourage entrepreneurial behavior. Partly because it
involves integrating “hardware” elements (e.g., characteristics of organizational structure)

with “software” elements (e.g., culture and climate) (Covin & Slevin, 2002), creating an
effective architecture is often the most difficult part of crafting a successful CE strategy
(Garvin, 2002). In the absence of an entrepreneurial strategic vision, pro-entrepreneurship
organizational architectures are unlikely to take shape because there will be no overriding
philosophical justification or perspective, endorsed by top management, that encourages
entrepreneurial thought and action throughout the organization (Morris & Kuratko, 2002;
Muzyka et al., 1995). In the presence of an entrepreneurial strategic vision, the organi-
zation’s structure, culture, resources, and systems—elements that collectively define an
organizational architecture—are likely to assume particular qualities.
Structure. Fundamentally, structure is an organization’s arrangement of authority, com-

munication, and workflow relationships. Logic dictates that executives with entrepreneur-
ial strategic visions will favor structures with qualities or attributes believed to promote
the realization of those visions. Fortunately, much is known about the structural attributes
of the organizations through which executives often seek to realize their entrepreneurial
visions (Cornwall & Perlman, 1990; Muzyka et al., 1995).
While many structural attributes have been empirically linked to innovation activity in
organizations (see, for example, Lawrence & Lorsch, 1967; Mintzberg, 1979), perhaps the
single aspect of structure that best defines entrepreneurial organizations is structural
organicity. Organicity is the extent to which the organization’s overall form can be
characterized as organic or mechanistic, to use Burns and Stalker’s (1961) labels. Greater
organicity implies a proclivity toward such qualities as decentralized decision making,
low formality, wide spans of control, expertise- (vs. position)-based power, process
flexibility, free-flowing information networks, and loose adherence to rules and policies.
Greater mechanization implies the opposite. Empirical linkages between structural orga-
nicity or aspects of structural organicity and the tendency of organizations to exhibit
entrepreneurial behaviors have been demonstrated by, for example, Miller and Friesen
(1984), Covin and Slevin (1988), Merz and Sauber (1995) and Barrett and Weinstein
(1998). Consistent with their findings, we expect that entrepreneurial strategic visions will
be associated with the structural quality of organicity.
Culture. The specific attributes of organizational cultures that support entrepreneurial

behavior have been the focus of considerable theorizing as well as empirical research.
For example, Cornwall and Perlman (1990) argued that emotional commitment; relent-
less attention to detail, structure, and process; and a desire by each person to earn the
respect of her/his peers are associated with an entrepreneurial culture. According to
Timmons (1999), being well organized, being highly committed to work and willing
to accept responsibility for outcomes resulting from it, and a desire for high standards
are among the attributes associated with an effective entrepreneurial culture. Hornsby,
Kuratko, and Zahra (2002) found that cultures characterized by management support
(the willingness of top-level managers to facilitate and support entrepreneurial behavior,
including the championing of innovative ideas and providing resources necessary to
pursue them) and work discretion/autonomy (the willingness of top-level managers
to tolerate failure, provide decision-making latitude and freedom from excessive over-
sight, and to delegate authority and responsibility) promoted middle-level managers’
entrepreneurial behavior.
Importantly, top-level managers’ words and actions can significantly influence
organizational culture (Kilmann, Saxton, & Serpa, 1985). Therefore, as top-level man-
agers articulate and act upon an entrepreneurial strategic vision, it will likely affect the
organization’s cultural attributes, encouraging the formation of cultural norms favoring
January, 2009 31
entrepreneurship. These norms may, in turn, reinforce organizational members’ commit-
ment to the entrepreneurial strategic vision.
Resources/Capabilities. Resources represent what an organization has. When a combi-

nation of resources enables an organization to accomplish a task, those resources are
referred to as a capability. An entrepreneurial capability exists “. . . when an organization
exhibits a systematic capacity to recognize and exploit opportunity” (Covin & Slevin,
2002, p. 311) that rivals haven’t observed or have under-exploited (Hitt et al., 2002;
Ireland et al., 2001).
Recognizing and exploiting entrepreneurial opportunities require different resource
sets. For example, resources related to market and technology forecasting proficiency
are needed to recognize opportunities while resources associated with flexibility and
decision-making speed support exploiting recognized opportunities (Covin & Slevin,
2002). Entrepreneurial capability is strongest when grounded in idiosyncratic, hetero-
geneous opportunity recognition and exploitation resources that are valuable, rare,
imperfectly imitable, and nonsubstitutable (Barney, 1991). Moreover, compared with
tangible ones, intangible resources are more likely to be related to a strong entrepre-
neurial capability because they are socially complex and difficult for rivals to under-
stand and imitate.
Of particular relevance to our model of CE strategy, the accumulation of resources
and the capabilities they enable are a partial function top-level managers’ decisions and
actions (Grant, 1991). Executive decisions and actions will, in turn, reflect their visions
for their organizations (Collins & Porras, 1996). Therefore, executives subscribing to an
entrepreneurial strategic vision will likely encourage acquiring resources that collectively
promote an entrepreneurial capability.
Reward Systems. Organizational systems can have a direct and immediate effect on the
occurrence of entrepreneurial behavior. In particular, whether or not the reward system
encourages risk taking and innovation has been shown to have a strong effect on indi-
viduals’ tendencies to behave in entrepreneurial manners. Kuratko, Montagno, and
Hornsby (1990) empirically identified “reward and resource availability” as a principal
determinant of entrepreneurial behavior by middle- and first-level managers. Similar
results have been reported in subsequent studies (e.g., Hornsby et al., 2002; Hornsby,
Kuratko, & Montagno, 1999; Morris & Jones, 1995).
Reward systems are, of course, part of the organizational architecture top executives
assist in creating. Whether formal or informal, reward systems will likely be influenced by
the vision executives articulate for their organizations. Hence, consistent with the obser-
vations of Miles et al. (2000), entrepreneurial visions are likely to lead to reward systems
that encourage entrepreneurial behaviors.
In summary, the following proposition is offered regarding the anticipated
relationships between entrepreneurial strategic vision and key structural, cultural,
resource, and reward systems-related aspects of a pro-entrepreneurship organizational
architecture:
Proposition 10 (a,b,c,d): The presence of an entrepreneurial strategic vision as

developed and communicated by top-level managers is positively related to (a) the
degree of structural organicity, (b) the strength of cultural norms favoring entrepre-
neurial behavior, (c) the strength of the organization’s entrepreneurial capability, and
(d) the extent to which the organizational reward systems encourage entrepreneurial
behavior.

Entrepreneurial Strategic Vision to Entrepreneurial Processes
and Behavior
With an entrepreneurial strategic vision, entrepreneurial activity is the core, defining
organizational attribute. These visions are molded by top-level managers harboring pro-
entrepreneurship cognitions and reinforced by cultural norms favoring entrepreneurial
behavior. Entrepreneurial strategic visions are realized when entrepreneurial processes of
opportunity recognition and exploitation take place throughout a firm. These processes are
enacted by the organization’s membership through many specific entrepreneurial behav-
iors. As noted earlier, a pro-entrepreneurship architecture is the organizational vehicle that
facilitates congruence between the entrepreneurial strategic vision and the specific entre-
preneurial actions organizational members take.
An entrepreneurial strategic vision may also have a direct effect on entrepreneurial
processes and behavior. Research suggests that an organization’s membership can and
often does react directly to the strategic vision espoused by top-level managers (Collins &
Porras, 1996; Ireland & Hitt, 1999). As such, when an organization’s top-level managers
develop and clearly communicate an entrepreneurial strategic vision, organizational
members will have encouragement, guidance, and a philosophical justification for entre-
preneurial actions. Under such conditions, an entrepreneurial opportunity is more likely
to be recognized and pursued (Kuratko, Ireland, & Hornsby, 2001). Manifestation of
the entrepreneurial processes of opportunity recognition and exploitation throughout the
organization may, in turn, reinforce top-level managers’ commitment to an entrepreneurial
strategic vision. The following proposition is offered:
Proposition 11 (a,b): The presence of an entrepreneurial strategic vision is positively
related to the probability that organizational members will (a) recognize entrepre-
neurial opportunities and (b) seek to exploit entrepreneurial opportunities.
Pro-Entrepreneurship Organizational Architecture to Entrepreneurial

Processes and Behavior
As suggested earlier, pro-entrepreneurship cognitions among an organization’s mem-
bers will prompt recognizing and exploiting entrepreneurial opportunities. However, it
takes the right set of organizational architecture attributes to perpetuate and reinforce
recognizing and exploiting entrepreneurial opportunities. In particular, without structural
organicity and strong entrepreneurial capabilities, as well as cultural norms and reward
systems that encourage and support entrepreneurial behavior, systematically recognizing
and exploiting entrepreneurial opportunities will not happen regardless of how intensely
pro-entrepreneurship an organization’s members may be. Consistent with this point,
research has demonstrated that the degree to which an organization’s architecture reflects
pro-entrepreneurship attributes has great bearing on the extensiveness of entrepreneurial
activity in the organization (Kuratko et al., 1990; Sathe, 1988). Our propositions are as
follows:
Proposition 12 (a,b,c,d): The (a) degree of structural organicity, (b) strength of
cultural norms favoring entrepreneurial behavior, (c) strength of the organization’s
entrepreneurial capability, and (d) extent to which the organizational reward systems
encourage entrepreneurial behavior are positively related to the probability that orga-
nizational members will recognize entrepreneurial opportunities.
Proposition 13 (a,b,c,d): The (a) degree of structural organicity, (b) strength of
cultural norms favoring entrepreneurial behavior, (c) strength of the organization’s
January, 2009 33
entrepreneurial capability, and (d) extent to which the organizational reward systems
encourage entrepreneurial behavior are positively related to the probability that orga-
nizational members will seek to exploit entrepreneurial opportunities.
The Outcomes
Entrepreneurial Process and Behavior to CE Strategy Outcomes

Entrepreneurial behavior results in various individual- and organizational-level out-
comes. Individuals and organizations evaluate achieved outcomes and their consequences
relative to incurred costs and opportunity costs. Resulting from these evaluations are
decisions regarding the status (continuance, rejection, or modification) of personal entre-
preneurial behavior (an individual-level issue) and the status (continuation, rejection,
or modification) of the CE strategy (an organizational-level issue) (Kuratko, Hornsby, &
Bishop, 2005). For individuals, the principal consequences to be evaluated concern the
degree to which the organization recognized and rewarded their entrepreneurial behavior
(Amit, Muller, & Cockburn, 1995; Kuratko, Hornsby, et al., 2005; Reynolds, 1987; Shane
& Venkataraman, 2000).
For the organization, consequences primarily concern the degree to which using a CE
strategy resulted in acceptable (or better) current performance and portends the possibility
of acceptable (or better) future performance, where performance is defined in terms of the
outcomes of interest. Our model emphasizes the organizational-level outcomes of CE
strategy. There are two principal types of such outcomes: (1) capability development, and
(2) strategic repositioning. We adopt this emphasis because our focus is on conditions and
decisions that drive choices to form a CE strategy. In this context, we are relatively more
concerned with strategic formulation issues than with strategic implementation issues.
Just as individual managers can acquire knowledge and skills through their entrepre-
neurial behaviors, organizations can learn and develop capabilities by implementing CE
strategies. Enhanced competitive capability, in particular, often results from exploiting
entrepreneurial opportunities. Competitive capability is the capacity of firms to create and
sustain economically viable industry positions (Nelson, 1991; Teece, Pisano, & Shuen,
1997). Competitive capability is created as organizations use entrepreneurial initiatives to
explore new technologies or product-market domains or exploit existing technologies or
product-market domains. Such initiatives commonly facilitate creating useful organiza-
tional knowledge that forms the bedrock of organizational capabilities (Tidd & Taurins,
1999). As McGrath (1999) points out, even “failed” entrepreneurial initiatives can
produce useful knowledge, thereby potentially enhancing an organization’s ability to
effectively compete. Of course, not all lessons gleaned from entrepreneurial initiatives
will prove to be organizationally useful. And new, competitively relevant lessons cannot
be expected from all entrepreneurial initiatives. Nonetheless, as argued by Zahra, Nielsen,
and Bogner (1999, p. 170), “In many areas, CE activities can create new knowledge that
can improve the firm’s ability to respond to changes in its markets by enhancing the
company’s competencies and thus determine the results of competitive rivalries among
firms.”
Regarding strategic repositioning, the very act of implementing CE strategy through
entrepreneurial behaviors can (1) place the firm (or portions thereof ) in a new position
within its pre-existing product-market domain(s), (2) alter the attributes of that domain(s),
and/or (3) position the firm within a new product-market domain(s). Consistent with this
point, Stopford and Baden-Fuller (1994) argue that the CE (in particular, the strategic
renewal form of CE) enables firms to assume new strategic positions vis-à-vis competitors.

Likewise, Covin and Miles (1999, p. 53) assert that “major repositioning actions” are
typical of established firms that engage in CE. In short, as suggested in our model of CE
strategy, the following relationships are proposed:
Proposition 14 (a,b): The exploitation of entrepreneurial opportunities is positively
related to (a) the strength of the organization’s competitive capability and (b) the
realization of strategic repositioning.
CE Strategy Outcomes to Organizational and Environmental Conditions

The CE strategy outcomes of competitive capability changes and strategic reposition-
ing effects can have direct and indirect effects, respectively, on future of CE strategy, as
detailed as follows.
Competitive Capability to Pro-Entrepreneurship Organizational Architecture. Figure 1

suggests that competitive capability changes can directly impact future CE strategy through
their effects on the organization’s architecture. In particular, a firm’s competitive capability
will be inextricably tied to the entrepreneurial capability component of organizational
architecture. Research suggests that exploiting entrepreneurial opportunities enables orga-
nizations to both strengthen existing capabilities and build new capabilities (Covin, Ireland,
& Kuratko, 2003). These capability-building effects of opportunity exploitation are
reflected in our CE strategy model. As organizations’ competitive capabilities are being
built by exploiting entrepreneurial opportunities, routines are being formed and processes
developed that enable the organization to better mobilize its resources in pursuit of those
entrepreneurial opportunities. These resource mobilization routines and processes allow
the organization to be strategically responsive to conditions in its environmental context,
thus creating and perpetuating a state of heightened competitiveness. Significantly, these
same routines and processes, resulting as they do in an increased capacity of the organiza-
tion to be strategically responsive, may better enable organizations to act on recognized
entrepreneurial opportunities (Ireland et al., 2003; Zahra, Jennings, et al., 1999). Success-
fully exploiting such opportunities is, after all, a function of how effectively resources can
be mobilized around their pursuit (Shane & Venkataraman, 2000). Thus, the same core
strategic response capability that enables organizations to build and sustain competitiveness
should also enable organizations to systematically and continuously exploit entrepreneurial
opportunities. This implies that competitive capability and entrepreneurial capability will
often be built together. The interdependence of competitive and entrepreneurial capability
is reflected in the following proposition:
Proposition 15: The strength of an organization’s competitive capability is positively
related to the strength of its pro-entrepreneurship organizational architecture.
Strategic Repositioning to External Environmental Conditions. Strategic repositioning

effects will indirectly impact CE strategy by altering the external environmental condi-
tions that organizational members may examine when considering the appropriateness
of such strategy. The impact of strategic repositioning on these external environmental
conditions can be understood through considering what strategic repositioning does to or
for a firm. Specifically, strategic repositioning can change the relationships among com-
petitors in an industry by strategically locating the firm within a newly defined competitive
space (Stopford & Baden-Fuller, 1990). The assumption of new competitive positions
reflects content changes in a firm’s strategy and impacts with whom the firm competes.
January, 2009 35
Strategic repositioning can also imply the creation of changes to the defining character-
istics of a firm’s competitive space, as would be typical of firms whose strategies represent
novel industry recipes (Spender, 1989) that reflect strategic innovation (Markides, 1998)
or value innovation (Kim & Mauborgne, 1997). Alternatively, and consistent with Covin
and Miles’s (1999) “domain redefinition” form of CE, strategic repositioning can place
firms in entirely new competitive spaces.
The effects of each of these repositioning possibilities will be a disruption of the status
quo within an industry. With such disruption, there are inevitably industry winners and
losers. More importantly, such disruptions prompt causal chains of competitive action
and reaction (Chen, 1996), and industry dynamism and uncertainty will often prompt
firm-level innovation in a positive feedback cycle (Grimm & Smith, 1997; Miller & Friesen,
1984). The realization of strategic repositioning as a result of exploiting entrepreneurial
opportunities thus represents a change to the competitive landscape. Plausible external
responses may include altered levels of competitive intensity, technological change, and
product-market domain evolution. In short, the following proposition is offered:
Proposition 16 (a,b,c): The realization of strategic repositioning by an organization
is related to external environmental changes involving (a) the intensity of competition,
(b) the rapidity of technological change, and (c) product-market domain evolution (as
reflected in product-market fragmentation and emergence rates).
As a final comment on our model, it might be noted that the interpretations and causal
attributions made by an organization’s top managers may be of particular significance to
perpetuating CE strategy. Top managers must believe that positive outcomes for them-
selves and their organizations can be linked back to the presence of CE strategies. In the
absence of such beliefs, and recognizing that a CE strategy begins with top management’s
entrepreneurial cognitions and entrepreneurial strategic vision, top-level managers will
likely choose to de-emphasize entrepreneurship as the defining element of the firm’s
corporate strategy. Thus, the external environmental conditions that provide a congenial
context for the enactment of CE strategies cannot guarantee that such strategies, if
adopted, will be sustained over time (Ireland et al., 2003).
Discussion and Conclusion
Herein, we have outlined a model of the antecedents, elements, and consequences of CE

as an identifiable strategy. The current model is in some ways similar to existing strategy
models grounded in evolutionary theory (Nelson & Winter, 1982). For example, like Lovas
and Ghoshal’s (2000) model of strategy as guided evolution, the current model recognizes
the roles of administrative systems (as reflected in a pro-entrepreneurship organizational
architecture), an objective function for the organization (as reflected in an entrepreneurial
strategic vision), and individual units of selection (as reflected in entrepreneurial processes
and behavior) as elements that define the evolutionary path of the organization. Nonethe-
less, it would be misleading to claim that evolutionary theory is the theoretical foundation
upon which the proposed CE strategy model is built. Given the diversity of constructs, levels
of analysis, and relationships explored in the proposed model, it is doubtful that a single
theory or small set of theories can be offered that can support all of the model’s propositions.
Because of this, future researchers are justified in taking a multi-theoretic approach to test
the individual propositions of our model (Ireland & Webb, 2007a).
That said, strong theoretical support of the multi-level and interconnected nature of
entrepreneurial processes in established firms is provided by Dutta and Crossan’s (2005)

“4I” framework. They describe the multilevel phenomena of entrepreneurial opportunity
recognition and exploitation as follows:
. . . learning begins when individuals develop an intuition [the first I] with respect to
a business opportunity on the basis of their prior experience and recognition of
patterns as external events unfold. The individual uses these patterns to make sense of
what is going on—to interpret an insight or an idea and to put it into words. Individual
interpretation [the second I] can be strengthened or reinforced by sharing it with a
group who can then engage in joint exploration, interpretation, and integration [the
third I] of the idea, to develop it into a shared understanding of a feasible business
proposition. Over time, shared understanding can be institutionalized [the fourth I] at
the organizational level in the form of systems, structures, strategy, and procedures,
for example. (Dutta & Crossan, 2005, pp. 434–5)
In short, Dutta and Crossan’s (2005) 4I framework provides a theoretical justification
for linking individual-level entrepreneurial cognitions and organizational-level entre-
preneurial outcomes. Of particular note, Dutta and Crossan explicitly argue that
individual-level intuitions and interpretations of business opportunities can become insti-
tutionalized in the form of organizational-level strategies. As such, the 4I framework
supports the theoretical defensibility of treating CE strategy as a multilevel construct.
Summarizing our model, we propose that individual entrepreneurial cognitions and
external environmental conditions are the initial impetus for adopting a CE strategy,
and outcomes are assessed to provide justification for a CE strategy’s continuance,
modification, or rejection. CE strategy is reflected in three elements: an entrepreneurial
strategic vision, a pro-entrepreneurship organizational architecture, and entrepreneurial
processes and behavior as exhibited throughout the organization. With varying degrees of
intensity, CE strategies become routine in deeply entrepreneurial firms (e.g., Eisenhardt
et al., 2000; Muzyka et al., 1995; Sathe, 1988). However, this is not to suggest that
managers in organizations with CE strategies will necessarily be unconscious of those
strategies. It is just that CE strategy cannot simply be consciously chosen and quickly
enacted. This is so because CE strategy requires more than a decision, act, or event. It
requires congruence between the entrepreneurial vision of the organization’s leaders and
the entrepreneurial actions of those throughout the organization, as facilitated through the
existence of a pro-entrepreneurship organizational architecture.
CE strategy also requires consistency in approach and regularity in behavior. As
argued by Mintzberg (1987b, p. 29), “strategy is a concept rooted in stability.” Therefore,
firms with CE strategies must engage in entrepreneurial behavior on a relatively regular or
continuous basis. Obviously, how extensively firms must engage in entrepreneurial behav-
ior before the presence of a CE strategy can be claimed is a matter of degree. At one end
of the continuum is stability—the absence of innovation—with chaos—overwhelming
innovation—being at the other. Baden-Fuller and Volberda (1997, p. 99) rightfully assert,
we believe that
Resolving the paradox of change and preservation means recognizing that continuous
renewal inside a complex firm is misleading. Too much change will lead to chaos, loss
of cultural glue, fatigue, and organizational breakdown (Volberda, 1996). While in the
short term, organizations that are chaotic can survive, in the longer term they are likely
to collapse (Stacey, 1995).
Eisenhardt et al. (2000) perhaps best captured where firms with CE strategies lie along
the “innovation” continuum in their observations concerning “competing on the entrepre-
neurial edge.” Firms with CE strategies remain close to the “edge of time,” judiciously
January, 2009 37
balancing the exploitation of current entrepreneurial opportunities with the search for
future entrepreneurial opportunities. Such firms are always near chaos, both strategically
and structurally, but they have the wisdom and discipline to recognize the possibility of
and avoid the type of collapse to which Baden-Fuller and Volberda (1997) refer.
To summarize, the core position we take herein is that CE strategy can be regarded as
a specific type of strategy. To possess such a strategy, firms must significantly display the
three foundational elements of an entrepreneurial strategic vision, a pro-entrepreneurship
organizational architecture, and entrepreneurial processes and behavior as exhibited
throughout the organization. The absence or weakness of any of these elements would
indicate that CE strategy does not exist in a firm.
Nonetheless, the reality or manifestation of CE strategy is not as “clean” as that of
some other corporate strategies. For example, an acquisition strategy is unequivocal in its
existence or lack thereof. That is, the parent firm either acquires all or portions of (as
reflected in partial equity investments) an external business or it does not. However, in the
case of CE strategy, the individual foundational elements can exhibit varying degrees of
intensity and/or organizational pervasiveness. As such, it is possible to conceive of the CE
strategy as identifiable along three separate continua reflecting the aforementioned foun-
dational elements. Positions at the “low” ends of these continua would indicate little or
weak evidence of the element’s existence; positions at the “high” end would indicate
abundant or strong evidence of the element’s existence. The strength of the evidence
needed to claim the presence of a CE strategy is inherently a judgment call on the
observer’s part.
Contributions to the CE Literature

We believe that our model contributes to the growing literature on CE in several ways.
First, our model brings specificity to the concept of CE strategy, a concept that is
inconsistently depicted, ambiguously described, and quite often, simply undefined in the
academic literature. We used five criteria (focal entrepreneurial phenomena, the locus of
entrepreneurship, the relationship between entrepreneurial phenomenon and strategy, the
causally adjacent antecedents of the entrepreneurial phenomenon, and the causally adja-
cent outcomes of the entrepreneurial phenomenon), to highlight the differences among
existing conceptualizations of entrepreneurial phenomena in organizations (we summa-
rize the results of this effort in Table 1). Some concepts associated with CE are used in
fairly consistent manners in the literature. Corporate venturing, for example, is usually
used to refer to the same phenomenon (i.e., new business creation in the corporate
context). A perusal of the CE literature reveals that CE strategy, or more commonly,
entrepreneurial strategy, is a label attached to quite a variety of phenomena or not attached
to specific phenomena at all (see, for example, the scholarly compilations by Meyer and
Heppard [2000] and Hitt et al. [2002]). Through its identification of the specific elements
of CE strategy, our model adds substance to the concept and thereby may facilitate its
understanding.
Second, our model demonstrates that for CE to operate as a strategy, it must “run
deep” within organizations. Top managers are increasingly recognizing the need to
respond to the entrepreneurial imperatives created by their competitive landscapes
(Ireland & Hitt, 1999). Our model suggests that minimal responses to these entrepreneur-
ial imperatives, reflecting superficial commitments to CE strategy, are bound to fail.
Moreover, while top-level managers can instigate CE strategy, they cannot dictate it.
Research indicates that those at the middle and lower ranks of an organization have
important roles to play in implementing a CE strategy (Kuratko, Ireland, et al., 2005).

Without sustained and strong commitment from these lower levels of the organization,
entrepreneurial behavior will never be a defining characteristic of the organization as is
required by CE strategy.
Third, our model ties together those elements of CE strategy that the extant literature
suggests go together. The novelty in our model is not in its individual elements, but in the
configuration of these elements in a new model in which CE strategy is not simply
represented by a single “box.” Indeed, others have talked about the importance to entre-
preneurial strategy of entrepreneurial strategic visions, or pro-entrepreneurship organiza-
tional architectures, or entrepreneurial processes and behaviors that cross levels of the
organizational hierarchy. However, to our knowledge, no existing model or theoretical
framework depicts the elements of CE strategy as holistically as does the current model.
Fourth, our model implies that a possible lack of robustness is a key vulnerability of
CE strategy. Specifically, CE strategy will be hard to create, and perhaps, even harder to
perpetuate in organizations. The presence of certain external environmental conditions
may be sufficient to prompt an organization’s leaders into exploring the possibility of
adopting a CE strategy. However, the commitment of individuals throughout the organi-
zation to making CE strategy work and the realization of personal and organizational
entrepreneurial outcomes that reinforce this commitment will be necessary to ensure that
entrepreneurial behavior becomes a defining aspect of the organization. Breakdowns in
any of the three elements of CE strategy, or in linkages between or among these elements,
would undermine the viability of such strategy. Moreover, alignments must be created in
evaluation and reward systems such that congruence is achieved in the entrepreneurial
behaviors induced at the individual and organizational levels. Thus, while external con-
ditions may be increasingly conducive to adopting CE strategies, we harbor no illusions
that the effective implementation of these strategies will be easily accomplished.
Implications for Research and Practice

Beyond the aforementioned direct contributions of our model, our depiction of CE as
an identifiable organizational strategy has two important implications for CE research and
practice. First, the model implies that fit between different pairs and collectively among all
of the elements of a CE strategy is a prerequisite to success. In this sense, the elements of
entrepreneurial strategic vision, pro-entrepreneurship organizational architecture, and
entrepreneurial processes and behavior represent the core work associated with use of a
CE strategy. Supporting this work and increasing the likelihood of its success is the degree
of fit between and among the elements. Indeed, to varying degrees, the paper’s proposi-
tions suggest a bundle of “fits” that are necessary for CE success. As suggested earlier,
breakdowns in any of the model’s specified relationships could substantially reduce the
probability of CE strategy enactment and success. Symmetrical and effective information
flows would support efforts to achieve fit among a CE strategy’s elements as would
the organization’s ability to codify knowledge learned through using CE strategy.
Knowledge-management systems, through which parties are responsible for ensuring that
organizational members have access to information needed to use a CE strategy, could
also facilitate developing and maintaining fit among a CE strategy’s elements.
The model’s second implication concerns the guidance that is implied for firms
interested in understanding the concept of CE strategy as an initial step. We offer two
issues warranting consideration in this respect. First, the firm wishing to adopt a CE
strategy should recognize that, perhaps to a greater degree than when using other strate-
gies (e.g., diversification, differentiation, cost leadership, etc.), the primary activities
associated with successful entrepreneurship (i.e., recognizing opportunities) must be
January, 2009 39
integrated with the primary activities associated with successful strategic management
(i.e., exploiting opportunities) if a CE strategy is to be effective. Thus, an effective CE
strategy results from the firm’s ability to take entrepreneurial actions within the context of
a strategic perspective (Hitt et al., 2002; Ireland & Webb, 2007b; Ireland et al., 2001).
Firms considering the possibility of using a CE strategy should carefully analyze their
ability to think strategically when acting entrepreneurially. Strategic thinking influences
the formation of an entrepreneurial strategic vision as well as the making of decisions
regarding the nature of a firm’s pro-entrepreneurship organizational architecture. Entre-
preneurial actions are the bedrock of entrepreneurial processes and behavior. The second
area of guidance our model suggests is the need to effectively manage the firm’s
resources. The success of a CE strategy is more probable when a firm has the skills
required to structure (accumulate and strategically divest), bundle (successfully combine),
and leverage (mobilize and deploy) its resources (Sirmon, Hitt, & Ireland, 2007). Some-
what related to the issue of fit that we examined earlier, a CE strategy’s effectiveness and
efficiency is enhanced when resources are properly managed.
Research Challenges
Greater understanding of CE as a particular type of organizational strategy will
emerge as scholars complete empirical studies examining the phenomenon. The proposi-
tions associated with the current model are possible sources for empirical studies. Effec-
tively dealing with the sample and measurement challenges inherent to this topic will be
critical to obtaining valid insights from empirical work. Two research challenges and
some possible ways in which they might be addressed are identified.
First, researchers must be able to operationally identify samples of firms that exhibit
CE strategies to various degrees (thus minimizing the “restriction of range” problem
within the sample). Of particular difficulty will be identifying firms exhibiting highly
entrepreneurial CE strategies. This will be a challenge because of two of the aforemen-
tioned points: (1) CE strategies may not be robust, and (2) continuously evolving orga-
nizations such as those employing highly entrepreneurial CE strategies may be vulnerable
to collapse. Thus, firms with highly entrepreneurial CE strategies may be few in number.
As a possible solution to the sample identification challenge, researchers are encouraged
to consider three preliminary sample screens: new product introduction rate, new line-of-
business introduction rate (controlling for growth through acquisition), and high rankings
on industry reputational surveys regarding innovation and entrepreneurship-related
matters over an extended period of time. While somewhat blunt metrics for the purpose of
assessing a firm’s innovativeness, it would be unusual for firms with highly entrepreneur-
ial CE strategies to not score high on one or more of these metrics.
Second, researchers must be able to verify the presence and strength of an entrepre-
neurial strategic vision as a defining mind-set shared by the organization’s top managers.
Vision is a phenomenon that is undoubtedly easier to conceptualize than measure. Judg-
ment calls would need to be made regarding such questions as “How should vision
consensus be evaluated?” “Who must share the vision?” and “What constitutes defensible
evidence of a vision’s presence?” As an initial thought concerning the final question,
certainly, pronouncements of a “pro-entrepreneurship” nature by an organization’s execu-
tives to the organization’s membership would be expected if those members were to
understand the vision from the executives’ perspective, as required by a CE strategy. Such
pronouncements could be written or oral, but researchers would need to be able document
them through secondary sources, ideally over a period of several years.

To conclude, many organizations are choosing to embrace entrepreneurial behavior as
a defining element of their corporate strategies as well they should, given the conditions
in their external environments. How such strategies differ from more traditionally recog-
nized corporate strategies has only recently become the subject of broad discussion, and
much remains to be learned about the matter. Toward this end, this paper offers a novel
model that depicts the “workings” of CE as a unique, identifiable organizational strategy.
Hopefully, this model provides some cohesion to the currently fragmented knowledge
base within the CE domain and can serve as one framework on which future CE theory can
be built.
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R. Duane Ireland is a Distinguished Professor and holds the Foreman R. and Ruby S. Bennett Chair in
Business in the Mays Business School, Texas A&M University, College Station, Texas.
Jeffrey G. Covin is the Samuel and Pauline Glaubinger Professor of Entrepreneurship at the Kelley School of
Business, Indiana University, Bloomington, Indiana.
Donald F. Kuratko is the Jack M. Gill Chair of Entrepreneurship, Professor of Entrepreneurship & Executive
Director of the Johnson Center for Entrepreneurship & Innovation at the Kelley School of Business, Indiana
University, Bloomington, Indiana.
The guest editors acknowledge that a prior version of this paper was presented at the Max Planck Ringberg
Entrepreneurship Conference on Strategic Entrepreneurship in June 2007. The authors wish to thank our
discussant, Anne Huff, and the other conference attendees for their helpful feedback. Two anonymous
reviewers provided invaluable guidance in the final development of this manuscript.

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Our knowledge of corporate entrepreneurship (CE) continues to expand. However, this

20 ENTREPRENEURSHIP THEORY and PRACTICE

Prior Models of Entrepreneurial Phenomena in Established Organizations

Models of Entrepreneurial Phenomena in Established Organizations

Relationship between Causally adjacent Causally adjacent outcomes

ENTREPRENEURSHIP THEORY and PRACTICE

An Integrative Model of Corporate Entrepreneurship Strategy

24 ENTREPRENEURSHIP THEORY and PRACTICE

A Model of Corporate Entrepreneurship Strategy

As depicted in Figure 1, we believe that a CE strategy is manifested through the

Individual Entrepreneurial Cognitions to Entrepreneurial Strategic Vision

26 ENTREPRENEURSHIP THEORY and PRACTICE

Proposition 2: The strength of organizational members’ pro-entrepreneurship cog-

Individual Entrepreneurial Cognitions to Entrepreneurial Processes

Proposition 3 (a,b): The strength of organizational members’ pro-entrepreneurship

28 ENTREPRENEURSHIP THEORY and PRACTICE

External Environmental Conditions to Entrepreneurial Processes

Entrepreneurial Strategic Vision to Pro-Entrepreneurship

30 ENTREPRENEURSHIP THEORY and PRACTICE

Structure. Fundamentally, structure is an organization’s arrangement of authority, com-

Culture. The speciﬁc attributes of organizational cultures that support entrepreneurial

Resources/Capabilities. Resources represent what an organization has. When a combi-

Proposition 10 (a,b,c,d): The presence of an entrepreneurial strategic vision as

32 ENTREPRENEURSHIP THEORY and PRACTICE

Pro-Entrepreneurship Organizational Architecture to Entrepreneurial

Entrepreneurial Process and Behavior to CE Strategy Outcomes

34 ENTREPRENEURSHIP THEORY and PRACTICE

CE Strategy Outcomes to Organizational and Environmental Conditions

Competitive Capability to Pro-Entrepreneurship Organizational Architecture. Figure 1

Strategic Repositioning to External Environmental Conditions. Strategic repositioning

Discussion and Conclusion

Herein, we have outlined a model of the antecedents, elements, and consequences of CE

36 ENTREPRENEURSHIP THEORY and PRACTICE

Contributions to the CE Literature

38 ENTREPRENEURSHIP THEORY and PRACTICE

Implications for Research and Practice

40 ENTREPRENEURSHIP THEORY and PRACTICE

Cornwall, J. & Perlman, B. (1990). Organizational entrepreneurship. Homewood, IL: Irwin.

42 ENTREPRENEURSHIP THEORY and PRACTICE

44 ENTREPRENEURSHIP THEORY and PRACTICE

46 ENTREPRENEURSHIP THEORY and PRACTICE

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